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A new kind of designation for socially conscious and environmentally friendly companies is helping families align their investment portfolios with their charitable causes. The designation flags up-and-coming companies that are dedicated to tackling society's ills while potentially providing investors with a decent return.

Newlyweds Liesel Pritzker Simmons, 28, and Ian Simmons, 36, were delighted to find this nascent system after casting far and wide for good leads on how to invest in young companies that promise to deliver both profit and a real impact on the world, frequently called impact investing.

Liesel Pritzker Simmons famously sued her Chicago-based family, eventually forcing the breakup of the Pritzker family's assets, but these days she and her husband are laser-focused on investing in socially sensitive agriculture in Colombia and affordable housing in East Africa. "We don't have children yet," says Liesel, "but we ask ourselves, 'What do we want them to know about how we invest our money?' "

Andrew Kassoy, co-founder of B Lab
Peter Murphy for Barron's

An example: In August, Goldman Sachs invested $9.6 million in New York City's first Social Impact Bond (SIB), which funds personal-responsibility education for teens imprisoned on New York's Rikers Island. If over a four-year period the program succeeds in reducing the city's teen reincarceration rate by 20%, Goldman will make $2.1 million, almost a 25% return on its investment. New York City is able to offer such impressive returns because incarcerating repeat offenders is a huge financial burden; a drop in recidivism translates into major budget savings.

That was the sort of investment the Simmonses wanted, but when they hired impact-investing consultant Jed Emerson to guide them in the process of converting their traditional portfolio, the couple quickly discovered it can take years to unwind current investments and create the new ground rules, implement them, and then accurately monitor the results. One major hurdle: a lack of socially and environmentally oriented firms capable of handling direct investments. "There just aren't enough of the companies creating solar panels or turning sewage into fuel while turning a profit," says Liesel.

Kassoy and his partners spotted a bottleneck. Financiers like the Simmonses are claiming there is not enough "product," when there are more than a 100,000 businesses that identify themselves as "impact investments" in the U.S., and many of them eager to find new capital. This disconnect suggested opportunity to the partners.

B Lab's work starts with certifying that a business meets B Lab's standards to qualify as altruistic. If it does, the firm is labeled a "B Corp," a designation that certifies a company is trying to solve social and environmental problems. "There is an alphabet soup of quality certification for products -- Fair Trade, Organic, Leadership in Energy and Environmental Design -- but [there was] none for businesses," says Kassoy. "And most people are deeply cynical about claims companies make about themselves."

To get B Lab's certification, a firm fills out an evaluation form measuring the company's impact on workers, community, and the environment, as well as its internal governance. Companies scoring at least 80 out of 200 are reviewed by a B Lab staff member, who requests that the firms submit supporting documentation. To ensure that certified companies don't go off track as they grow, they are required to build safeguards into their corporate governing documents. Bylaws are written for each company, addressing issues ranging from wages paid to entry-level workers to managing the firm's carbon footprint.

The process has cred. Yale School of Management now forgives student loans of M.B.A.s who work for a B Corp after graduation. Working with corporate-law firms, B Lab has also drafted legislation that would establish a "Benefit Corporation," a legal entity in which directors are held accountable for their treatment of people and the planet alongside their responsibilities to maximize shareholder profits.

There is of course push-back over this social engineering, but B Lab's legislation has been enacted in 11 states representing 40% of the nation's economy, including New York, California, and Illinois. "There is recognition that B Corps create high-paying, long-term employment," says Kassoy. B Lab is essentially asking, he says, " 'What is the purpose of capital? How should we be thinking about it -- and to what end?' "

At the 2011 Clinton Global Initiative, B Lab launched a kind of social-investing Morningstar, grading companies separately on their financial performance as well as their impact on environment, workers, and communities. An investor can in this way choose between a business with a modest environmental rating and an 18% return on investment, or an outfit with top community marks but an anemic 2% return.

There are currently more than 600 certified B Corps around the globe, including Cabot Creamery, Patagonia, Cascade Engineering, Seventh Generation, and Dansko. A long way still to go, in other words, but if the trend continues, the Simmons family will one day enjoy a rich choice of impact-investing options.